1. What’s my budget?
Money will likely be an important factor in your decision. The upfront costs associated with a home purchase are much higher than renting a home, but if you use the home often, ownership can offer many benefits. Notably, ownership of a whole home or a Pacaso is true real estate ownership, and any equity gains realized are yours.No big purchases, please: If saving for a second home isn’t part of your financial plan, paying nightly for vacation rentals is a fine alternative. Just keep in mind how often you travel, and recognize that you generally pay a premium when you compare the per-day cost of a rental to an owned home. The sky’s the limit: Great! You can buy a whole second home of your choice. Realistically, however, most people who budget for a whole second home are looking at mid-tier homes which may be in short supply (especially in popular second home locations). If a whole home is the best fit for your needs, be prepared for more competition and more compromises. I want more for less: You got it! Co-ownership boosts your purchasing power, enabling you to buy a higher-end home for a mid-tier price. With ownership starting at one-eighth, you can co-own a luxury $2 million Pacaso for just $250,000.Am I willing to spend time on homeowner tasks?
Do you get excited about home improvement projects and bill-payment spreadsheets? Or, when you’re away from home, are utilities and lawn care the last things you want to think about?HGTV enthusiasts: If you’re handy (or have a reliable network of handy people) and get satisfaction from the effort you put into your home, whole second home ownership might be a good fit. You control what gets done, on what schedule, and you can use your skills to maintain the home (potentially saving money, in exchange for your time).Vacationers: If you’re traveling with a vacation mindset, a trip to the hardware store is not on your agenda. Go with a vacation rental, and if the faucet drips, no worries. You’re only there for a few days.Time-preservers: If you’re looking for true ownership, but you want to maximize your time and enjoyment of your second home, professionally managed co-ownership is ideal. Pacaso handles the ongoing costs of ownership like maintenance, repairs, property management, bill payment and more. Operating costs are passed through to owners with no markup, and Pacaso charges a fixed monthly program management fee per share for its services. Below, you'll see how the estimated operating costs of a Pacaso compare to a whole second home, along with the cost of renting a similar rental. Co-ownership can provide a significant cost advantage long-term over both options.Whole second home | Co-ownership (1/8 share)* | Comparable luxury rental | |
---|---|---|---|
Design, furnishings, upgrades and moving costs | $490,000 | Included; turnkey | N/A |
Monthly property management | $3,200 | $400 | N/A |
Monthly Maintenance | $3,200 | $400 | N/A |
Monthly property taxes | $3,800 | $225 | N/A |
Monthly home insurance | $3,200 | $475 | N/A |
Monthly utilities | $1,800 | $200 | N/A |
Estimated total cost | $16,800 /month* | $2,101 /month* | $1,400-1,500 /night |